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High deliverability - worth investing in?

Investments on deliverability should be driven by sensible, well thought-out commercial reasoning rather than by ‘scare’ stories in the industry press.

Following E-consultancy's report that shows that the email platforms and services market is set to grow by 20% to an estimated value of £178 million by the end of this year, I'm convinced that one of the main drivers of this growth is deliverability - email marketers are investing in achieving better deliverability rates.

I'm torn between whether email marketers are spending on deliverability as a result of not wanting to be the star of the next 'scare' story in industry press (such as have appeared on this very site!) or through sensible, thought-out commercial reasoning.

Interestingly, DMA research (The Email Service Provider Distribution Report available at www.dma.org.uk) shows a real difference in the level of deliverability achieved by UK email service providers.

[This is only half the story too. There are also companies with in-house email systems - how are they faring? In my experience, many are not even measuring them to find out.]

The survey of Email Service Providers (ESPs) identified that they are achieving different rates of false positives of between 0.5% to over 5%.

The difference in these 'blocked in error' email rates shows how even those dedicated to email broadcasting are experiencing varying success rates. This is something all email marketers should consider when deciding on an ESP partner.

Why worry about deliverability?

Last week over lunch, I was chatting with one of our clients who operate in the online retail sector. This large brand was still mulling over whether deliverability investments were worthwhile and was struggling to concoct a way of proving the business case to colleagues.

We ended up doing some simple maths to work out ROI in order to come to a decision. These sums can be used by anyone and are shared below:

With a low deliverability rate

In this example, 100,000 people are mailed and 95% are delivered (the worst rate in the DMA research) meaning 95,000 are delivered.

Of them, say 5% click through (4,750 visits) and 10% convert on site. This leads to 475 orders

With a higher deliverability rate

Using the same numbers but just increasing the deliverability rate, 100,000 people are mailed again and 99.5% are delivered (best rate in DMA research) This means that 99,500 are delivered.

Of them, 5% click through again meaning 4,975 visits and 10% convert on site = 498 orders

The difference is 23 orders. Just using the average transaction value of a typical order, you can calculate the absolute return. If this increase in revenue is higher than the investment into better deliverability rates, then the decision is easy.

Looking at the flip side, should your deliverability rate worsen, then the potential to miss out on orders is a sobering thought. Email marketers experiencing erratic rates may want to consider this and work with their ESP to implement a monitoring policy or measures to take away the uncertainty.

[In addition to this, there are concerns about how emails are displayed and the impact on brand, but this is something for another blog entry.]

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Comments (2)

I agree that it's definitely right that companies should look at the business case for investing in deliverability.

I'm not sure though that 'scare story' is the right way to describe E-consultancy's problems getting emails through to hotmail which we are sure could be a costly problem for other businesses as well.

It's worth bearing in mind that the issues we faced and the steps we took to address them were ultimately a business decision as well.

over 11 years ago

Nigel Williams, MD at Emailcenter UK

Interesting post but I have a problem with the term "Deliverability Rate".

One of the problems with "Deliverability Rate" is no-one seems to use the same measuring technique.

Some call D.R. List total minus Bounces which does not take into account filtered email by spam filters.

At the more sophisticated end it might be using a seed list of popular domains. Say this seed list contains for the sake of argument 10 addresses each at the likes of Hotmail, AOL, Yahoo etc etc and if 8 of these addresses receive your email in the inbox then this counts as 80% delivery rate. Of course this is not accurate either as a typical B2C marketer might have 95% of their addresses at the main 3 ISP's or a B2B marketer might have only 5% of their list at any of these ISP's.

You could get even more sophisticated and work out how many Hotmails etc in the list and do the calculation in conjunction with your seed list.

My main point though is none of these stats the likes of the DMA or any email service provider provides is worth having. Not only does the survey owner use the calculation that suits them best, the calculation is flawed AND this is before you start trying to calculate across thousands of customers email campaigns of varying volumes and content. I also doubt that may of the respondents in the DMA survey can accurately provide deliverability rates other than those defined as sent minus bounces.

The stats that are useful to analyse are on a per domain basis in terms of bounces and clicks. You will only know for sure you have deliverability issues when open/click rates are much lower at some ISP's than others.

Businesses should use the technique described by Henry for justifying investment in deliverability but they also need to choose the right stats to work with in the first place.

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